Ferrari - Earnings Call - Q3 2025
November 4, 2025
Transcript
Operator (participant)
Good day, and thank you for standing by. Welcome to the Ferrari Q3 2025 results conference call and webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, please press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please note that today's conference is being recorded. I will now like to turn the conference over to your speaker, Nicoletta Russo, Head of Investor Relations. Please go ahead.
Nicoletta Russo (Head of Investor Relations)
Thank you, Raja, and welcome to everyone who's joining us. Today, we plan to cover the group third quarter 2025 operating results, and the duration of the call is expected to be around 45 minutes. Today's call will be hosted by the Group CEO, Mr. Benedetto Vigna, and Group CFO, Mr. Antonio Picca Piccon. All relevant materials are available in the investor section of the Ferrari corporate website, and at the end of the presentation, we will be available to answer your questions. Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statements included on page two of today's presentation, and the call will be covered by this language. With that said, I'd like to turn the call over to Benedetto.
Benedetto Vigna (CEO)
[Foreign language], Nicoletta. Thank you, everyone, for joining us today. The past few months have been rich with important milestones for our company, among which the launch of the Ferrari Amalfi, the 849 Testa Rossa family, the first step of the reveal of the Ferrari Elettrica, and the capital market day. Let's start from the capital market day. On October 9, in Maranello, we gathered together and we shared our ambitions and plans for the future with investors, journalists, and the entire world. In this current uncertain world, we shared an ambitious financial floor for the end of this decade: EUR 9 billion of revenues, 40% EBITDA margin, and 30% EBIT margin. What did we say? What did we say at the capital market day exactly? Two things. We highlighted that Ferrari is a unique company which combines three dimensions: heritage, technology, and racing.
It has a dual identity, both inclusive and exclusive, capable of engaging with the Ferrari and brand lovers across generations and geographies. We are set, ambitious for each soul with an unwavering goal to keep our brand strong for the longer term, well beyond 2030. In racing, we aim to win. We want to continue to be successful. In endurance and come back to victory in Formula One. We owe this to our Tifosi to fuel their passion and the inclusive side of our brand. In sports cars, we continue to focus on managing and crafting the exclusivity of our product through a horizontal product diversification strategy which ensures scarcity for each single model. We confirm our innovation pace. We will continue to offer our clients an average of four new models per year between 2026 and 2030.
Across the three different powertrains: ICE, hybrid, and electric, to address different clients' and different clients' needs. In 2022, we told you that the 2030 breakdown of powertrain offerings would have been 20% ICE, 40% hybrid, and 40% electric. Our plans were based on the environment in 2022 and our expectations about its evolution. Today, in 2025, we have deliberately recalibrated our powertrain offer to be 40% ICE, 40% hybrid, and 20% electric. Why did we decide this? Two are the main reasons. One, market dynamics. We have always believed in electrification as an addition, not as a transition. Overall, market adoption of electric technology has been more gradual than anticipated in 2022. At the same time, demand for thermal and hybrid models has been more sustained. Two, client centricity. We put our clients always at the center of what we do.
We are very flexible and agile to adapt our product plans to the evolving environment, developing and offering models that best address our client needs and meet their preferences. Regardless of the powertrain, we will keep on harnessing each technology in a unique and distinctive way, enhancing the driving emotions and staying true to our belief that we have to be innovative, adapting to the changing times. That is what our founder did since 1947 when he dared to develop our first 12-cylinder engine, although nobody believed in it. It's our responsibility. It's our responsibility to keep alive this will to progress. This technology neutrality approach is something we have chosen, we have planned for, and invested in, also from an infrastructure point of view. The e-building, our new facility in Maranello, capable to manufacture the three powertrains, is the perfect example of this flexible approach.
Our research and development efforts will not only focus on powertrain performance but also on vehicle dynamics, experience on board, and the new materials, all of which make our product unique. Moving to clients, we will continue to grow our Ferrari family, which today counts 90,000 active clients, and to foster their sense of belonging in community through an ecosystem of unique experiences from track to road to brand. Lastly, lifestyle. This is the soul that is instrumental to enrich the client experience and to widen our audience beyond our Tifosi and Ferraristi. I personally believe the team did a great job in bringing brand consistency. We then translated everything I just said with the help of Antonio, and let me underline a couple of elements. One, we continue to grow our business to new heights in an organic and consistent way.
We look at the 2030 target as a floor of our ambitions, always acting in the long-term interest of our brand, safeguarding exclusivity above all. The macroeconomic environment remains uncertain and extremely volatile. However, the visibility and solidity of our business model allowed us to commit to an ambitious plan of six years of growth, which we will execute with focus and discipline as we did for the previous one. We will continue to deliver on our promises. Then we concluded the capital market day with our renewed decarbonization commitment. We have already achieved approximately 30% reduction in our Scope One and Scope Two emissions and approximately 10% reduction per car in Scope Three emission in 2024 versus 2021. We will capitalize on this achievement.
The clear target to reduce our Scope One and Scope Two emission by 10x in 2030 versus 2021, and to decrease by 25% the absolute Scope Three emission in 2030 versus the past year, 2024. Moreover, the day before the capital market day, we unveiled the technology heart of our Ferrari Elettrica. This represents the first step of the reveal, which will be followed by the look and feel of the interior design concept in Q1 2026 and the complete car in Q2 2026. As a leader, Ferrari takes its innovation responsibility very seriously. The Ferrari Elettrica is a new opportunity to reaffirm our will to progress. As it has happened many times in the past with the introduction of innovative concepts such as with the turbo engines, hybrid powertrains, and most recently with the Purosangue, there is great anticipation to experience the driving emotion of the Elettrica.
After the capital market day, I met several clients in the USA, in Korea, in China, and in Italy, and all of them appreciated the way we present the model. This is what they told me: "Electric cars are generally heavy as elephants and not fun to drive. You did well to invest in an active electronic system to transform the elephant into a horse and to engage the drivers with pedal shift, like in all Ferrari. We are looking forward to driving it.
We can continue to be innovative if we keep the pace of change, and having the three powertrains in our portfolio is a clear advantage, especially in front of younger generations." With the first step of the reveal of the Ferrari Elettrica and the unveiling in September of the 849 Testa Rossa Coupe and Spider, we have concluded the six launches we had announced one year ago for the entire 2025. I met many clients in Europe, in the USA, and in China who are in love with the Testa Rossa. Last week in China, I met a young female client, younger than 40 years old, and she told me, "Testa Rossa is the perfect harmonious blend of design and engineering, elegance, and craftsmanship. I'm eager to own one and drive it." In the past few months, almost all range models in production were substantially sold out.
The launches of the Testa Rossa family and the Amalfi and their great traction among clients are initially contributing to the order intake. Indeed, the order book extends well into 2027. Over the next few quarters, we will have a significant changeover of models. Indeed, in January 2025, only 15% of our lineup was in ramp-up phase of production, while we will close the year with 35% of the lineup in ramp-up phase. And this is the result of all the activities of development that we did in the past years. Moving to the quarter Q3 2025, saw continued growth. Just a few key numbers to highlight. One, total revenues reached approximately EUR 1.8 billion, a 7.4% growth year over year with flat deliveries. Two, strong profitability with EBIT of over EUR 500 million. And last but not least, industrial free cash flow at EUR 365 million. These are solid business performance.
Solid business performance allowed us to revise upward the 2025 guidance during the capital market day in October. Our revised guidance exceeds the profitability target we had originally set for 2026 in the previous business plan, one year in advance. Moreover, the decision to complete the current share repurchase program within this year, once again one year earlier than planned, also reflects such progress and strong confidence that we have in the future. Now I will leave the stage to Antonio to explain the quarter in more depth.
Antonio Piccon (CFO)
[Foreign language] Benedetto, and good morning or afternoon to everyone joining us today. Starting on page four, we provide the highlights of the third quarter, which once again delivers consistent growth and demonstrates solid progress. Product mix and personalization, along with driving revenues, were the main drivers of revenue and profitability growth, with shipments in line with the previous year.
This resulted in a strong industrial free cash flow generation in the period. Let me underline that such results were accomplished notwithstanding the impact of the incremental US import tariffs, which became visible in Q3. A greater foreign exchange rate headwind, and lower deliveries of the Daytona SP3, which was phased out in the quarter. On page five, we dive into our shipments. They were driven by the 296 GTS, the Purosangue, the 12-cylinder family, which continued its ramp-up phase, and the Roma Spider. The SF90 XS family increased its contribution. The 296 GTB decreased, approaching the end of its life cycle, and the SF90 Spider phased out. Deliveries of the Daytona SP3 were lower than the prior year and concluded their limited series run. As anticipated by Benedetto, in the quarter, we started a significant changeover of models, which will be also visible in the next quarter.
The SF90 family and the Roma were already phased out, and the 296 family is approaching the end of its life cycle. Indeed, those models will be progressively replaced, starting from next year, by the 849 Testa Rossa family, the Amalfi, and the 296 Speciale, respectively, a record number of new models introduced at the same time. On page six, the net revenues show a 9.3% growth versus the prior year at constant currency. This translates into a 7.4% growth, including the headwind from currency, mainly related to the US dollar dynamics. The increase in cars and spare parts was driven by the richer product mix as well as higher personalizations, despite the lower deliveries of the Daytona SP3, which followed our plans.
Personalizations accounted for approximately 20% of total revenues from cars and spare parts and were particularly relevant for the SF90 XS family and the Purosangue, also supported by the adoption of carbon and special paint. Sponsorship, commercial, and brand also increased thanks to higher sponsorships and the improved performance of the lifestyle activities, as well as higher commercial revenues linked to the better prior year Formula One ranking. Moving to page seven, the change in EBIT is explained by the following variances. Mix and price was positive thanks to the enriched product mix. Indeed, despite the phase-out of the Daytona SP3, the product mix was sustained by the higher end of our product offering, namely the SF90 XS and the 12-cylinder families. The mix was also supported by the increased contribution from personalizations. Please note that the impact from incremental U.S..
import tariffs, as well as from the update of our commercial policy in response, are included in the mix and price variance. This resulted in a margin dilution at constant currency, particularly visible in the third quarter since the majority of our shipments in the United States was represented by models whose prices were protected under the updated policy. Industrial costs and D&A were lower year over year, in line with model life cycles, partially offset by higher development costs for racing. As D&A were also higher, reflecting racing expenses and brand investment. Other was positive mainly thanks to racing and lifestyle activities. Percentage margins continued to be strong in the quarter despite the dilution from increased import duties, with EBITDA margin at 37.9% and EBIT margin at 28.4%.
Turning to page eight, our industrial free cash flow generation for the quarter was strong at EUR 365 million and reflected the increase in profitability, partially offset by capital expenditures, which were mainly focused on product development and the progress in the new paint shop construction, and the negative change in working capital provisions and others, mainly due to the reversal of the advances collected in previous quarters. Net industrial debt was EUR 116 million at the end of September. Also reflecting the share repurchase program executed in the quarter, which is approaching its completion by year-end, as reminded by Benedetto, one year in advance compared to our plans as announced in June 2022.
Moving to page nine, we confirm our 2025 guidance, which was revised upward during the capital market day on October the 9th, on the back of the solid business performance and reflecting improved sports car revenues, including personalizations. A lighter than expected cost base, despite a greater headwind from foreign exchange rates and increased U.S. tariffs. And with this in mind, for Q4, we project lower deliveries year over year, as we already told you in the second quarter call, and this is in connection with the changeover of models that I mentioned earlier on. A positive product mix, although sequentially tighter, in line with the phase-out of the Daytona and the first unit of the F80. Higher D&A and a seasonal step-up in racing R&D expenses, as well as higher D&A dictated by the start of production of new models.
Looking at 2026 and beyond, let me remind you that the introduction of the F80 will be gradual. As usual, it will take a couple of quarters to ramp up the production, and the life cycle is expected to be around three years. The cadence of the F80 and the model changeover will imply a more back-end load in 2026 and will shape the product and country mix throughout the year. Such developments are consistent with our plans to deliver in the years to come a smooth and as linear as possible expansion of our profitability in absolute terms. Be assured that we continue to execute on this plan with discipline and focus, and today's strong results provide once again the evidence of our continued commitment. Thanks for your attention, and I turn the call over to Nicoletta.
Nicoletta Russo (Head of Investor Relations)
Thank you, Antonio.
And Andrea, we are now ready to take the questions. Please go ahead.
Operator (participant)
Thank you. As a reminder to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. Once again, please press star one and one on your telephone and wait for your name to be announced. Thank you. We are now going to proceed with our first question. And the questions come from the line of Michael Benetti from Evercore ISI. Please ask your question.
Michael Binetti (Senior Managing Director)
Hey, guys.. Thanks for taking our question here. Just a couple for me. Antonio, I think you're saying that the mix impact in the second half will be a little bit better than what you anticipated. I saw that mix added about $25 million in the quarter. I think last call you said mix would be neutral for the second half. So can you just help us think what's driving a little bit of that upside and maybe how much we can think about in fourth quarter for mix relative to the third quarter? And then I guess just as we think about the. Personalization comments you made about 20% now, you guided to personalization being closer to 19% longer term. It's a little counterintuitive to us with the new Taylor-Made Studios and the paint shop coming online next year. Maybe just walk us through. What drives the moderation there.
Benedetto Vigna (CEO)
Yeah. Okay. Thank you, Michael. On the first question, yes, the mix in the second. Can you hear well, Michael?
Michael Binetti (Senior Managing Director)
I'm sorry. What was that coming out of?
Benedetto Vigna (CEO)
I was saying, can you hear well?
Michael Binetti (Senior Managing Director)
Not very well, no.
Benedetto Vigna (CEO)
That's just the way I asked you because we understood that someone was not able to listen to hear well. I don't know. This is a. Right?
Michael Binetti (Senior Managing Director)
Yeah.
Benedetto Vigna (CEO)
Okay. I'll try and answer. I hope you can hear me. Yes, the mix impact in the second half of the year has been slightly better than anticipated. So I remember I answered you in the second quarter call that we would have expected the mix more neutral in the second half. Now this is slightly improved, at least based on the. Third quarter results. And this is mainly due to personalization that remained very, very strong.
With respect to your second quarter, second question, we said we have prepared the plan on the basis of a 19% longer-term penetration of personalization. In this respect, the contribution of Taylor-Made, and in particular, the Taylor-Made center, bear in mind that they have been taken into consideration mostly to come closer to our clients. So. The overall consideration on the penetration of personalization takes that into account with a view to be close to our clients also in countries where such Taylor-Made personalization are particularly relevant, such as Japan and the Western coast of USA.
Michael Binetti (Senior Managing Director)
Okay. And can I just ask you one clarifying comment? You said the F80 will roll out over three years. Am I wrong, or is that a little longer than the normal cadence for one of the strictly limited or supercar models like this?
And is there a strategy behind stretching that out a little longer? I would think normally you'd see the bulk of those shipments in maybe 8 or 10 quarters.
Benedetto Vigna (CEO)
This is very much in line with what we've been doing on the Icona recently, considering the overall number of cars involved and the start-up phase that is entailed in order to get to run rates of production.
Michael Binetti (Senior Managing Director)
Okay. Thanks, guys. I appreciate it.
Operator (participant)
Thank you. We are now going to proceed with our next question. The next questions come from the line of Stephen Reitman from Bernstein. Please ask your question. Hello, Stephen. Your line is open. You may ask your question. Hello, Stephen Reitman. Can you hear us? Your phone might be on mute. Your line is open. If you may ask your question. Okay. It looks like the person has just disconnected.
We are now going to proceed with our next question. The next questions come from the line of Flavio Cereda from GAM. Please ask your question.
Flavio Cereda (Investment Manager)
Yeah. Hi, Benedetto, Antonio. Good afternoon. So my question is. I'm taking you back to the capital markets day and your projections of top-line growth to 2030. So a very simple question: volume price mix, volume, you guys control it, mix to a point. And I was just wondering, on price. Your pricing power, given all that's been done and the great results that we've seen in recent years, Benedetto, where do you think you stand on this? Do you think you're coming to an end here, or do you think there's more to come?
Benedetto Vigna (CEO)
Thank you, Flavio, for the question. It's not at all at an end.
Actually, we feel confident that with all the innovation that we have to delight our clients, we do not see any weakening in our pricing power. We will continue to offer, Flavio, cars with different positioning. All of them will benefit from the pricing power because this pricing power, just to be clear, is not coming because we will just increase the price for the same, let me say, product as it is. No. We will make richer and richer, more and more innovative in the product so that by delighting the client, we are confident that we will keep our pricing power. And this is what we are working on, and this is. The goal of all the money that we invest in R&D, in innovation, with all the team here.
Flavio Cereda (Investment Manager)
So aligned to more models, fewer volumes.
Benedetto Vigna (CEO)
Yeah.
Flavio Cereda (Investment Manager)
Okay. Perfect. Thank you.
Benedetto Vigna (CEO)
Thank you, Flavio. Thank you.
Operator (participant)
We are now going to proceed with our next question. And the questions come from the line of Thomas Besson from Kepler Cheuvreux. Please ask your question.
Thomas Besson (Head of Automotive Research)
Thank you very much. I'll have two questions, please. First. On hybrids, I think the share was lost in a couple of years. Is it linked with the changeover of product, or is it driven by. Willingness to reduce overall hybrid share to eventually address. Excess deliveries in certain markets and residual values? That's for the first question. And the second. Could you give us the delivery figures, please, for the Q3 data now, and how many F80 you're already going to launch in Q4, please?
Benedetto Vigna (CEO)
Okay. So the first one, Thomas, is that. It depends on the offers that we have on the lineup we are offering to our clients.
The number of hybrid cars that we are offering is reducing because there is a change in the model. So there is no, if you want, there is no surprise over there. It's a consequence of the way we launched the car. No, that's it. Don't extrapolate any trend over there, okay? And it's not related. To the propulsion. The second is how many F80 we are planning to sell in Q4. Just the initial few units, Thomas. Not this number. And I thought I'm 40 in the third quarter.
Thomas Besson (Head of Automotive Research)
Thank you very much.
Benedetto Vigna (CEO)
Thank you.
Operator (participant)
Thank you. We are now going to proceed with our next question. And the next questions come from the line of Stephen Reitman from Bernstein. Please ask your question. Your line is opened.
Stephen Reitman (Equity Analyst)
Yes, good afternoon. Apologies. I had a problem with connection.
And I apologize also if the question's been asked before because I was cut off, so I had to redial in again. But thank you for your comments about the contribution of the 849 extending the coverage of your order book into 2027. I'd like to know if demand is similar for both the Coupe and for the Spider. And I know you don't comment on the order intake on a model-by-model basis, but could you talk about the level of interest you're seeing in the amount fee? Is demand strong for the entry products as it is for your higher-end products? And my second question is regarding also on the hybrids. You've given us some detail in the past about the penetration rates you're seeing for your extended warranty program for the battery program and the like.
And I think the last figure we had was running at about 15%-20%. Obviously, that's a very good way of improving the residual values of these vehicles and making these Ferrari cars last forever, as is your intention. So could you update us on where you are with that program? How well is it understood? Thank you.
Benedetto Vigna (CEO)
Thank you, Stephen. And I understand that electronics is not always working well before. That's the reason why we manage carefully electronics in our cars. Having said that. How is going the Purosangue? I think the Purosangue is proceeding better than the previous model. So this is very encouraging. The second point I can tell you is that I was in China the 21st of October, and I saw the first two Purosangues sold over there to a new client, younger than 40 years old.
I can also share with you that in order book, more than 50% of the new clients, sorry, 40% of the people that want to buy the Purosangue are new to the brand. And this is, let's say, we are pleased because one of the objectives of this car was to bring on board new to the brand. So that's the comment on Purosangue. The story of hybrid, the hybrid warranty, I think that. I mean, it's picking up, continues to pick up. It's more than 20%. But we see one simple thing. We have dealers that are able to explain it well. While we still see some dealers that have not yet explained it properly. So we are in the process to retrain some of our dealers because some of them are not able to explain properly the advantage of this warranty scheme.
So we see improvement, but I think there is more if all the dealers are able to explain properly. So that's on my side. Thank you, Stephen.
Stephen Reitman (Equity Analyst)
Thank you.
Operator (participant)
Thank you. We are now going to proceed with our next question. And the questions come from the line of Thomas Besson from Kepler Cheuvreux. Please ask your question.
Thomas Besson (Head of Automotive Research)
Thank you. I think I've already asked my question. So I think you can pass on to the next speaker.
Benedetto Vigna (CEO)
In fact, I was surprised.
Thomas Besson (Head of Automotive Research)
Yeah, me too, but thank you.
Operator (participant)
We are now going to proceed with our next question. And the next questions come from the line of Robert Karofsky from UBS. Please ask your question.
Robert Karofsky (Co-President of Global Wealth Management and President)
Hello. Just two questions for me, please. And just maybe starting with the Q3, I think we were expecting that it's going to be the weakest quarter in the year.
So obviously, something went better, and maybe we heard that it was personalization, but maybe if you could talk specifically about the U.S. Back in Q2, you mentioned that there is some change in consumer behavior because of the tariffs. Have you seen it normalizing right now after we have more clarity on tariffs? And maybe the second one also related to the US. Obviously, there's a lot of conversation about residuals, and there is some kind of concern about potentially increasing order cancellations. Have you seen any unusual or any pickup in orders cancellation in the US as consumers are a bit worried about potential change in residual values in the market? Thanks.
Antonio Piccon (CFO)
I'll take this question, Robert. So one, in US, the business proceeds as usual, number one.
Number two, the only difference we see in US is that if you compare today versus the previous call, at that time, the tariffs were still at 25%. Now, they are at 15%. Now, it's carved out in the stone. It's 15%. So that's the only difference we see. And we have been. You remember last time we told you when it will become. How can I say, blessed. By papers, then we will update the commercial policy, and that's what we did. That's what we did before. We said the price increase up to 10%. When the tariffs were 25%. And now we say price increase up to 5%. That's the only difference in US. Then the business. Proceeds as usual.
Benedetto Vigna (CEO)
And with respect to Q3 being originally thought as the weakest quarter in the year, I think the reason is that it's simple.
The level of personalization was higher than we were expecting. So that adds on the top line. And in terms of the cost basis, the point that I highlighted when we revised the guidance afterward, the cost base actually ended up being lower compared to our initial expectations.
Operator (participant)
Thank you. We are now going to proceed with our next question. And the questions come from the line of Tom Narayan from RBC. Please ask your question.
Tom Narayan (Lead Equity Analyst)
Hey, thanks for taking the questions. My first one, Antonio, I think. I didn't hear it, and you said it, but could you review the bridge again from. Q3 to Q4? I know the Daytona is zeroed out, but then maybe review. Maybe the R&D and. SG&A, and then I have a follow-up.
Antonio Piccon (CFO)
Yeah. With respect to Q4, Tom, I said there will be lower deliveries year over year.
That's a point that we already anticipated in the Q2 call. This is to be read in connection with the changeover of models that we discussed. Then I said there will be a positive product mix. Although we expect it's sequentially lighter, in line with the phase-out of the Daytona and the first unit of the F80. And the last point is that we expect higher SG&A. And a seasonal step-up in R&D expenses for. Development of the applications for the car, as well as higher D&A that are dictated by the start of production of the new models.
Tom Narayan (Lead Equity Analyst)
Got it. Okay. That's very helpful. And then I have a kind of high-level question. I think in the past, you've said that. When there's a new.
Kind of form factor, like Purosangue was a very different vehicle than you had ever made in the past, that initially, obviously, there is a. I don't know, like a margin headwind. Relative to. If it was a standard product that you've done before at the same. At the same price point. How do we think about the Elettrica from this standpoint, given that it's a completely different. Form factor? Is it safe to say that. There's a similar kind of margin headwind. Relative to. Models that you make at a much larger volume. Requiring less incremental. New spend? Is that a safe assumption to make? Thanks.
Antonio Piccon (CFO)
I think, Tom, you have good memory. That's what we said about Purosangue. But we said it when everything was announced and everything was clarified.
So I don't want to look like a monkey, but if you are patient a little bit, then we will be more precise on that.
Tom Narayan (Lead Equity Analyst)
Got it.
Antonio Piccon (CFO)
But Purosangue, you remember, we told you everything when the shape was visible. And not only the shape was visible. Thank you.
Tom Narayan (Lead Equity Analyst)
Understood. Thank you.
Operator (participant)
Thank you. We are now going to proceed with our next question. And the questions come from the line of James Kluznik from Jefferies International. Please ask your question.
James Kluznik (Analyst)
Yes. Buongiorno, Benedetto, Antonio, and team. I guess I have really a philosophical question for Benedetto just to follow up on Flavio's. I think. Benedetto, you've made it very clear that you expect a higher rate of innovation to continue to really support your pricing power for the brand.
But when I consider your 2030 plan, you seem to assume that that lever, that price mix lever, is going to be much less important than in the past. Should we be thinking that the rate of innovation in the next five years reduces to go hand in hand with that price mix lever being less important than in the past four years? Thank you.
Benedetto Vigna (CEO)
No, I think that innovation rate does not slow down, honestly. I think we have several innovations in the pocket that we plan to apply to the different cars, each one for its own positioning. And. I mean, if. We would sit on innovation, I don't think we would be calling Ferrari. So. The reason why I was very clear. To the question and answer to the question of Flavio Cereda is because we have several levers of innovation that go beyond the powertrain.
There is the vehicle dynamics. There is user interface. There is architecture. That is the driving thrill. We feel confident that once we apply this to the different models, we will be able to delight the client and thus to. Use properly the pricing power. Because we are not I would like to maybe underline one point. We are not a company that is increasing the price of the same object. Just because time goes on. No. We increase the price of what we do because we put something more innovative in it and because this innovation is going to delight our client. I think this is important. If you see also the way we increase the price in the past years, well, Ferrari has been unique in the sense that we have not increased the price of the same object, but we have put the innovation in the product.
And thus, because of the higher degree of innovation, high degree of delightment of the client, we exerted properly the pricing power. That has been and that's going to be in this way. James.
James Kluznik (Analyst)
That's very clear. That's it. Got it.
Benedetto Vigna (CEO)
Thank you.
Operator (participant)
Thank you. We are now going to proceed with our next question. And the questions come from the line of José Asumendi from J.P. Morgan. Please ask your question.
José Asumendi (Analyst)
Thank you very much. Thank you, Benedetto. Just one question, please. I get frequently asked a question after the Capital Markets Day with regards to, I think, very exciting future, I think, bright products that you're launching to the market. But they also require some investments, such as the launch of the Elettrica. I think some necessary investments like the paint shop. I know I think all the great facilities we saw during the Capital Markets Day.
The question is, to create that stability of margins in the business model, how can we think about the offsetting elements, the post-issue contributions you're going to have in the medium term to create that margin stability? And there might be some doubts in the market about the margin stability of the business model. How can we think about that balance between investments and then the opportunities you have to maintain and create that margin stability that you've shown, I think, in the past years? Thank you.
Benedetto Vigna (CEO)
Let me see because there was some noise. Just to make sure that I understood properly, José. I think that. If you want this question for me, the answer is related also to the previous one. The only way first of all, we are living in uncertain time. Yes.
There is no difference also if you want to many other cases in the history. Now, the only things we can do is to make sure that we keep innovating so to offer something that is unique to our client, unique in the performance, in engineering, unique in the design, unique in the way we do it. Because. Why are we doing the paint shop? Why did we do the e-building? Because we want to be unique in the way we manufacture our cars, whatever they are, ICE, hybrid, and green, electric. Why we are showing in a multi-step way the innovation of Elettrica? Because we want to make sure that all the work done by the engineers, well, it's not going to be lost.
Because there are so many new things in this car, as well as in the other cars, that we will make sure that innovation is properly explained to our client. We notice it. Let's put it this way. We notice it that for some cars in the past, there was a lot of innovation content, or there were several innovation contents that were not properly explained. And this is an area of improvement we have. When we do something new, either on technology, on design, on engineering, we have the responsibility to explain well to the world. Because behind that there is the work of many people, blue collar and white collars. So this is the philosophical question or the goal of this question, of this company, is to make sure that on the innovation side, whatever we do is unique.
And this is, if you want, the best guarantee of the long-term sustainability of what we do. That's it. I mean, only if you are unique, we can do something that guarantees the long-term sustainability. That's the reason why we gave you a view for the end of this decade. And we feel confident for that because of the uniqueness of what we do.
Operator (participant)
Thank you. We are now going to proceed with our next question. And the questions come from the line of Michael Tyndall from HSBC. Please ask your question.
Michael Tyndall (Stock Analyst)
Yes. Good afternoon. Thank you very much. Two questions, if I can. One for Antonio. Can we talk about the F1 budget for next year? So headline number, if I'm not wrong, is $215 from a current $135. From where you're sitting, is that just an incremental $18 million of cost.
Or does the scope change mean that actually the impact on your P&L is considerably lower than that headline number? And then the second one is just around. Can you talk a bit about FX on the order backlog? What scope do you have, and how much do you really want to push in terms of trying to offset what's going on with currencies on a backlog that now runs into 2027? Thanks.
Antonio Piccon (CFO)
Thanks, Michael. The first one, we really get a few cost increase. That's an element we need to take into account. If the F1 budget grows, this is flowing through our cost, and this is to be taken as a cost increase. On FX, on the order backlog. Based on the agreement that we have with dealers, in principle, we could change pricing with a 90-day anticipation, I guess. So it's something that, in principle, is possible.
We decide on a country-by-country basis and depending also on the move in terms of the exchange rate. On the size of the move.
Michael Tyndall (Stock Analyst)
Got it. Got it. Thank you.
Antonio Piccon (CFO)
Welcome.
Operator (participant)
Thank you. Given the time constraints, this concludes the question and answer session. I will now hand back to Benedetto Vigna, CEO, for closing remarks.
Benedetto Vigna (CEO)
Thanks for your time today and also for all your interesting questions. Thanks a lot. We remain focused on executing our plans throughout the rest of these years. And also, with confidence, we begin to build the next phase of our new business plan. It's a business plan that is ambitious, and we are highly confident that this is going to happen, will deliver on our promises as we already did so far.
And after this, I wish you a good morning or afternoon, and I thank you again for your attention and your questions. [Foreign language].
Operator (participant)
This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a good rest of your day.